Although many had hoped that home values would not fall further, the latest data indicates that negative equity is now a real problem for thousands. For those seeking home improvement loans, this is definitely unwelcome news. In order to get a home improvement loan, most homeowners have to put up a portion of equity in their homes. Now, this may not be possible and homeowners will have to defer getting a home improvement loan and making changes to their property.
CML Director general Michael Coogan said: “Without action the situation in the housing market will be worse than it needs to be. The housing correction will overshoot, and the knock-on effects on the wider economy will be significant.”
Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, said: “The latest numbers from the Bank of England demonstrate in the clearest possible way the consequences of the credit crunch for the residential property market. Unless the authorities take steps to restart the mortgage market the likelihood is that there will be more bad news in store for the both the housing market and retail sector during the latter part of the year.”
Related reading: Home Improvement Loan
Comment on this article